Footsie confidence knocked by US news

LONDON

LONDON’S FTSE 100 Index fell below the 7000 mark after confidence was knocked by US figures showing that growth almost skidded to a halt.

The US economy expanded at an annual rate of just 0.2 per cent in the three months to the end of March, official figures showed – battered by harsh weather, plunging exports and cutbacks in oil and gas drilling. Economists had forecast growth of one per cent.

The news pushed the FTSE 100 Index 84.3 points lower at 6946.3, having fallen by 73.5 points on Tuesday following weak UK GDP figures and jitters over the interest rate outlook in the United States.

The pound was a cent higher than the dollar at a little under $1.55 on the US news, which pushed the likelihood of an inter- est rate hike from June to September. However, sterling was a cent lower than the euro at just under €1.39, despite stagnant debt crisis talks with Greece. France’s Cac 40 and Germany’s Dax were both sharply lower.

In the top flight the weakness among mining stocks continued after weaker copper output figures from Antofagasta. The Chilean miner slipped 18p to 784p and

BHP Billiton eased 25.5p to 1564p.

Retailers took up some of the slack as Next rallied as much as three per cent before closing up 120p to 7285p after figures showed its sales grew 3.2 per cent in the 13 weeks to April 25.

April’s warm weather boosted the result, which was better than the company’s previous forecast for growth of up to three per cent in the first half of its financial year.

The retail cheer extended to the FTSE 250 Index after sandwiches chain Greggs said its like-for-like sales lifted 5.9 per cent in the 16 weeks to April 25.

It will also return £20 million to investors through a 20p a share special dividend. This replaces a proposed £10 million share buyback programme announced in March. Shares lifted more than seven per cent, or 79p to 1155p.

Among other retail stocks, B&Q owner Kingfisher fell 1.4p to 349p, although Sports Direct International improved 7.5p to 604.5p.

Elsewhere, shares in Barclays were almost two per cent lower after it announced an additional £1 billion of provisions to cover the mis-selling of payment protection insurance and potential fines for foreign exchange rigging.

Underlying profits were nine per cent higher at £1.85bn in the first half of the year but shares dipped 4.45p to 256.95p.

The biggest risers on the FTSE 100 Index were Weir Group up 98p at 1836p, Next up 120p at 7285p, Royal Mail up 6.6p at 444.2p and Intercontinental Hotels Group up 40p at 2844p. Biggest fallers were Hikma

Pharmaceuticals down 79p at 2042p, CRH down 69p at 1823p, Dixons Carphone down 13.1p at

418.9p and Carnival down 92p at 2964p.

NEW YORK

STOCK markets worldwide slumped on Wednesday after a batch of weaker-than-expected corporate results and data showing U.S. economic growth braked more sharply than expected in the first quarter, while the dollar plunged to a nine-week low.

Commerce Department data showed U.S. gross domestic product expanded at an only 0.2 percent annual rate, marking the weakest reading in a year, leading to a lower open on Wall Street.

The data also hit European shares, which already suffered from weak corporate results from companies including Delhaize and Norsk Hydro.

The FTSEurofirst 300 index of top regional shares was on track to close well over 1 percent lower for a second straight day.

A stronger euro also weighed on the region’s stock markets, with the currency hitting an eight-week high against the U.S. dollar at $1.10990.

The dollar index, which measures the greenback against a basket of six major currencies, hit a roughly nine-week low of 94.872 after the GDP data.

Investors also awaited the statement from the Federal Reserve’s latest two-day policy meeting, due at 2pm EDT, for clues on when interest rates are likely to be increased.

The Dow Jones industrial average .DJI was last down 49.78 points, or 0.27 percent, at 18,060.36. The S&P 500 .SPX was down 7.24 points, or 0.34 percent, at 2,107.52.

The Nasdaq Composite . IXIC was down 19.71 points, or 0.39 percent, at 5,035.71.